RadioShack Outlines Go-Forward Strategy

By Alan Wolf -- TWICE, 3/9/2009

FORT WORTH, TEXAS — RadioShack will “burnish” its brand, add more private-label programs, and continue to improve productivity and performance under its 2009 game plan.

Despite weak fourth-quarter results (see p. 8), chairman/CEO Julian Day told investors during an earnings conference call that the chain made significant operational improvements in 2008, and that sales have picked up since December.

To keep the momentum going through the new year and beyond, the company will break a new ad campaign in July that leverages RadioShack’s rich heritage while “clarifying its positioning” in the marketplace.

“The brand needs burnishing,” said chief marketing officer Lee Applbaum. “The name itself isn’t a significant barrier … there’s lots of brand equity in 'RadioShack.’”

Indeed, the company has launched a new, albeit fledgling, chain, and has given it the very un-RadioShack-like name of PointMobl. Executives wouldn’t comment on the three-store experiment, except to say that it is an exploration of different ways to present the company’s assortment.

That assortment will expand in the coming months as RadioShack rolls out three new private-label A/V and power accessory brands by the third quarter. Merchandising executive VP Peter Whitsett described the new additions as “national brand equivalents” that, along with the company’s Gigaware badge for music, gaming and mobile accessories, will comprise a “reinvigorated portfolio.”

Another cornerstone of RadioShack’s assortment will be the rapidly growing netbook category. The company hit pay-dirt with its Acer Aspire One promotion, which offers the 3G unit for $99 with a two-year AT&T contract, and Whitsett said “mobility has never been more important” to consumers and RadioShack.

“We are well-positioned to bring solutions and products together given our experience in mobility,” he said, and the company is launching new initiatives, sourcing abilities and supplier relationships to maintain market leadership.

The company has also enjoyed a strong resurgence in its post-paid Sprint and AT&T wireless businesses.

Asked about competition from Best Buy’s new in-store and stand-alone Mobile concept, which has been gaining significant market share, CEO Day said “Best Buy is a “great operator … but [the share gains are] not coming from us. There has been no negative impact.”